The biggest practical change is the arrival of Form No. 97 in place of the old Form 60 mechanism for specified no-PAN cases. But one point needs special care: for property transactions, there are two different limits that people often mix up. Rule 159 uses a ₹20 lakh threshold for PAN quoting in immovable property transactions, while Rule 237 uses a ₹45 lakh threshold for SFT reporting. Also, a person without PAN entering a property transaction above ₹45 lakh is expected to apply for PAN.
This guide explains the new PAN Rules 2026 in plain language, with examples for taxpayers, property buyers, banks, insurance companies, businesses and professionals.
- Why PAN Rules Matter in 2026
- Quick Summary of PAN Rules 2026
- Form 97 Replaces Form 60
- Property Transactions: ₹20 Lakh vs ₹45 Lakh Explained
- Cash Deposits and Cash Withdrawals
- Forex, Insurance, Hotels and Event Payments
- Vehicles, Stamp Paper and Pre-paid Instruments
- What Businesses Should Update
- Related DN & CO. Guides
- Frequently Asked Questions
- Official References
Why PAN Rules Matter in 2026
PAN, or Permanent Account Number, is not only a tax filing identity. It is the connecting thread between your bank accounts, property transactions, investments, insurance payments, cash movement and many high-value financial activities.
The Income Tax Department uses PAN-linked information to identify whether the financial activity reported by institutions is reasonably aligned with the income disclosed by the taxpayer. A high-value transaction is not automatically a tax problem. The issue starts when the source of funds, accounting treatment or return reporting does not match the transaction trail.
Quick Summary of PAN Rules 2026
| Transaction | Important PAN / Reporting Limit | Who Should Be Careful |
|---|---|---|
| Purchase, sale, gift or JDA of immovable property | PAN quoting under Rule 159 if amount or stamp value exceeds ₹20 lakh; SFT reporting under Rule 237 at ₹45 lakh or more | Property buyers, sellers, donors, developers, registrars and sub-registrars |
| Cash deposits in bank or post office accounts | Rule 159 covers cash deposits aggregating to ₹10 lakh or more in a financial year; Rule 237 reporting applies at ₹10 lakh with PAN and ₹5 lakh without PAN for non-current accounts | Small businesses, traders, rural account holders and cash-heavy taxpayers |
| Cash withdrawals from bank or post office | Rule 159 covers cash withdrawals aggregating to ₹10 lakh or more in a financial year; current account cash deposits or withdrawals have a separate ₹50 lakh SFT threshold under Rule 237 | Contractors, traders, firms and businesses using regular cash withdrawals |
| Foreign currency purchase or forex card / traveller instrument | Rule 237 reporting threshold: ₹10 lakh or more with PAN; ₹5 lakh or more without PAN | Travellers, students, forex dealers and outward payment planners |
| Hotel, restaurant, convention centre, banquet hall or event management bill | Rule 159 covers cash payment exceeding ₹1 lakh against bill or bills at any one time | Wedding families, event organisers, corporates and hospitality businesses |
| Insurance premium | Rule 159 covers account-based relationship with insurer where premium exceeds ₹50,000 in a financial year; Rule 237 reporting applies at ₹5 lakh with PAN and ₹2.5 lakh without PAN | Policyholders, insurers, ULIP investors and high-premium life insurance buyers |
| Motor vehicle or motor cycle | Rule 159 covers sale or purchase exceeding ₹5 lakh, including eligible motor cycles; tractor is excluded | Car dealers, premium bike buyers and vehicle finance teams |
| Stamp paper purchase through Stock Holding Corporation of India Limited | Rule 237 reporting threshold: ₹2 lakh with PAN; ₹1 lakh without PAN in one transaction | Property lawyers, businesses, consultants and documentation teams |
Form 97 Replaces Form 60
Under the old framework, a person who did not have PAN could furnish Form 60 for specified transactions. Under the Income-tax Act, 2025 and Income-tax Rules, 2026, the comparable declaration is now Form No. 97 for specified cases covered by Rule 159.
The Income Tax Department has clarified in its official forms guidance that persons who do not possess PAN may enter into specified Rule 159(2) transactions by filing Form No. 97, and that Form No. 97 replaces the earlier Form 60 mechanism under the new Act framework.
For a detailed DN & CO. explainer on similar form changes, you may also read our guide on new Income Tax Forms 2026 and old vs new form mapping.
Property Transactions: ₹20 Lakh vs ₹45 Lakh Explained
This is the most misunderstood part of the new PAN framework. Many summaries say, "PAN applies above ₹45 lakh property." That is incomplete.
1. Rule 159: PAN Quoting Threshold Is ₹20 Lakh
Rule 159 requires PAN to be quoted in documents for purchase, sale, gift or joint development agreement of immovable property where the transaction amount exceeds ₹20 lakh or the stamp valuation exceeds ₹20 lakh.
This means property transfers are not limited to ordinary sale deeds. Gift deeds and Joint Development Agreements are also expressly covered.
2. Rule 237: SFT Reporting Threshold Is ₹45 Lakh
Rule 237 deals with furnishing of statement of financial transaction. Under this rule, registrars and sub-registrars report purchase, sale, gift or JDA of immovable property where the amount is ₹45 lakh or more, or the stamp duty value is ₹45 lakh or more.
3. No-PAN Property Cases Above ₹45 Lakh
Rule 159(3) further provides that a person, not being a company or firm, who does not have PAN and enters into a property transaction above the ₹45 lakh threshold must apply for PAN.
Practical Example
Suppose Mr. A gifts a flat to his daughter. The registered gift deed shows a stamp duty value of ₹52 lakh. In this case, the transaction is covered because gift of immovable property is specifically included. PAN compliance will be important, and the transaction may fall within SFT reporting because the stamp duty value crosses ₹45 lakh.
If you are also dealing with an NRI property transaction, read our related DN & CO. guide on Non-Resident TDS, DTAA and NRI property compliance from FY 2026-27.
Cash Deposits and Cash Withdrawals
The new framework gives relief in some routine banking situations but increases the importance of annual tracking. Instead of looking only at one isolated deposit, taxpayers should track the aggregate value of cash deposits and withdrawals during the financial year.
Cash Deposits
Rule 159 covers cash deposits aggregating to ₹10 lakh or more in a financial year in one or more accounts of a person with a bank, co-operative bank or post office.
Rule 237 separately provides SFT reporting for cash deposits in accounts other than current accounts and time deposits where cash deposits in a financial year aggregate to ₹10 lakh or more for a person having PAN, and ₹5 lakh or more for a person not having PAN.
Cash Withdrawals
Rule 159 also covers cash withdrawals aggregating to ₹10 lakh or more in a financial year in one or more accounts of a person. For current accounts, Rule 237 has a separate SFT threshold for cash deposits or cash withdrawals aggregating to ₹50 lakh or more in a financial year.
For a broader checklist on banking limits, AIS and notice-risk areas, read our detailed guide on Bank Transaction Limits 2026 in India.
Forex, Insurance, Hotels and Event Payments
Foreign Exchange and Forex Cards
Rule 237 covers receipt from any person for sale of foreign currency, including credit to a foreign exchange card or expense in foreign currency through debit card, credit card, traveller's cheque, draft or other instrument.
The threshold is ₹10 lakh or more in a financial year for a person having PAN and ₹5 lakh or more for a person not having PAN. This matters for students going abroad, frequent travellers, forex card users and authorised dealers.
Insurance Premiums
Insurance is now more visible in the reporting framework. Rule 159 covers commencement of account-based relationship with an insurer where insurance premium exceeds ₹50,000 during a financial year. Rule 237 separately covers insurance premium receipts aggregating to ₹5 lakh or more with PAN and ₹2.5 lakh or more without PAN.
For example, if a person pays annual premiums of ₹6 lakh across high-value life insurance or investment-linked policies, the insurer may have reporting obligations under the rules.
Hotels, Banquet Halls and Event Managers
Rule 159 now specifically covers cash payments exceeding ₹1 lakh at any one time to a hotel, restaurant, convention centre, banquet hall or any person engaged in event management against bill or bills.
This is especially relevant for weddings, conferences, family functions and corporate events. A single cash-heavy event payment can create a PAN compliance requirement.
Vehicles, Stamp Paper and Pre-paid Instruments
Motor Vehicles and Premium Two-Wheelers
Rule 159 covers sale or purchase of a motor vehicle or vehicle requiring registration, excluding tractors, and also covers motor cycles as defined in the Motor Vehicles Act. The transaction threshold is amount exceeding ₹5 lakh.
So, a premium two-wheeler purchase above ₹5 lakh can attract PAN compliance. Agricultural tractors, however, are specifically excluded from this entry.
Stamp Paper Purchases
Rule 237 includes purchase of stamp paper through Stock Holding Corporation of India Limited. The reporting threshold is ₹2 lakh or more in one transaction for a person having PAN and ₹1 lakh or more for a person not having PAN.
RBI Regulated Pre-paid Instruments
Rule 237 also covers payments made in cash or otherwise for purchase of pre-paid instruments issued by RBI under the Payment and Settlement Systems Act, 2007, where the amount aggregates to ₹10 lakh or more during the financial year.
What Businesses Should Update
Businesses should not wait for the year-end to review PAN records. The new rules affect day-to-day onboarding, billing, receipt, KYC and reporting systems.
- Real estate businesses: Update documentation checklists for sale, gift and JDA transactions.
- Banks and post offices: Track annual aggregate cash deposits, withdrawals and time deposits.
- Insurance companies: Monitor premium receipts and account-based relationships above specified thresholds.
- Hotels and event managers: Build controls for cash bills exceeding ₹1 lakh.
- Vehicle dealers: Capture PAN correctly for vehicles and eligible motorcycles above ₹5 lakh.
- Businesses liable to audit: Continue monitoring high-value cash receipts and goods or services transactions carefully.
For businesses managing TDS and new-law transition together, our TDS Rate Chart FY 2026-27 and GST and Income Tax Compliance Changes FY 2026-27 guides may be useful companion reads.
Compliance Tips for Taxpayers
- Do not confuse PAN quoting with SFT reporting. Both are connected, but the thresholds may differ.
- Keep PAN updated in bank, investment, insurance and property records. Small spelling or data mismatches can create avoidable follow-up.
- Track annual cash movement. The new rules focus heavily on annual aggregates.
- Preserve source documents. Keep sale deeds, gift deeds, bank statements, loan papers, capital account records, cash books and invoices.
- Do not use Form 97 casually. If PAN is required or must be applied for, using only a declaration may not solve the compliance issue.
- Reconcile AIS and books before filing returns. Reported transactions can appear later in taxpayer information systems.
Related DN & CO. Guides
Frequently Asked Questions
1. Is PAN compulsory for property transactions above ₹45 lakh?
Yes, practically PAN becomes very important above ₹45 lakh because Rule 159(3) requires a no-PAN person to apply for PAN in such property cases, and Rule 237 SFT reporting applies at ₹45 lakh or more. However, the PAN quoting threshold under Rule 159 for property starts earlier, at more than ₹20 lakh.
2. Has Form 60 been replaced?
Under the Income-tax Act, 2025 framework, Form No. 97 is the declaration form for specified no-PAN cases under Rule 159. The Income Tax Department's official guidance says Form 97 replaces the earlier Form 60 mechanism under the new Act.
3. Can Form 97 be used for all property transactions?
No. Form 97 is relevant only for specified no-PAN cases. For immovable property above the ₹45 lakh threshold, a person without PAN is required to apply for PAN. Therefore, Form 97 should not be treated as a universal substitute for PAN.
4. What is the new cash deposit threshold?
Rule 159 covers cash deposits aggregating to ₹10 lakh or more in a financial year. Rule 237 reporting for cash deposits in non-current accounts applies at ₹10 lakh or more for a person having PAN and ₹5 lakh or more for a person not having PAN.
5. Are cash withdrawals now covered?
Yes. Rule 159 covers cash withdrawals aggregating to ₹10 lakh or more in a financial year in one or more accounts of a person with specified banking or post office institutions.
6. Are gift deeds covered under property reporting?
Yes. Purchase, sale, gift and joint development agreement of immovable property are specifically covered under the new rules.
7. Is PAN required for buying a luxury bike?
Yes, if the covered motor cycle transaction exceeds ₹5 lakh, Rule 159 can apply. This is a notable expansion compared with how many people understood the old vehicle PAN rule.
8. Are tractors covered under the vehicle PAN rule?
No. Tractors are specifically excluded from the motor vehicle entry under Rule 159.
9. Do insurance premiums get reported?
High-value insurance premiums can be reportable. Rule 237 covers insurance premium receipts aggregating to ₹5 lakh or more for a person having PAN and ₹2.5 lakh or more for a person not having PAN.
10. Why did the government introduce these changes?
The policy direction is clear: reduce avoidable compliance friction for smaller routine transactions, but improve traceability for property, cash movement, forex, insurance and other high-value transactions.
Official References
- CBDT Notification No. 22/2026 dated 20 March 2026 - Income-tax Rules, 2026
- Rule 159 of the Income-tax Rules, 2026 - PAN quoting and Form No. 97 framework
- Rule 237 of the Income-tax Rules, 2026 - Statement of financial transaction reporting
- Income Tax Department - Income Tax Forms guidance under Income-tax Act, 2025
Final Thoughts
The PAN Rules 2026 mark a shift from old-style form collection to more structured financial reporting. For taxpayers, the safest approach is simple: quote PAN wherever required, apply for PAN where the rule requires it, avoid casual cash handling in high-value transactions, and keep proper documents ready.
For businesses and professionals, this is the right time to update KYC checklists, billing software, property transaction documentation, insurance onboarding controls and annual transaction review processes. The rules are not designed to punish genuine taxpayers, but they do expect genuine taxpayers to leave a clear and consistent paper trail.